Hong Kong Stock Market Review: Rebound followed by a retreat

Market sees positive news and rises before falling back, with the speed of running getting faster, and the turnover of Hong Kong stocks also dropping to below 200 billion.

Sunac China discounted 20% for rights issue to raise HKD 1.2 billion, estimating that there was not enough time to issue the rights at a higher price before the holiday. Looking back at the atmosphere in 2022 and 2020 when it was still good, the company raised 4.5 billion and 8 billion respectively, this time 1.2 billion is undoubtedly just a drop in the bucket.

As stock prices rise, it is highly probable that various securities firms are busy devising rights issue or reduction plans for many companies. Although it is said so, having funds to take over is actually a good thing, as some can help PE investments in the previous period to exit, and it will also bring opportunities to investors. It is most important for the market to remain active.

Compared to the return of foreign capital, it may be easier for Hong Kong stocks to attract family office funds. Standard Chartered held the first Global Family Office Forum the day before yesterday, with 80 ultra-high-net-worth families from different markets of Standard Chartered participating, with 50 of them personally present in Hong Kong. At least from the perspective of the stock market, the trading volume of Hong Kong stocks is 10 times higher than that of Singapore.

Previously, Peter Thiel, a founding member of PayPal, the head of his family office, said that some wealthy individuals setting up family offices in Singapore is just one way of insurance, and currently some wealthy families are considering business returning to Hong Kong. At the same time, the Hong Kong government is considering increasing the types of eligible transactions for funds and single-family offices to enjoy tax concessions, whether this part of the funds can be attracted will determine the medium to long-term trend of Hong Kong stocks.

In addition, with Meituan listed in Hong Kong, the market is also rumored that SF Holdings will be listed in November, planning to raise $2 billion. SF Holdings announced the distribution of special dividends in the A-share market last week, indicating that it is ready to become the second largest IPO in Hong Kong this year.

However, compared to SF Holdings, JD Logistics may have greater potential, especially after cooperating with Alibaba, it is expected to take market share from SF Holdings.

The performance in the first half of the year has already reflected the achievements of JD Logistics in reducing costs and increasing efficiency. Continuing the good trend in efficiency enhancement, outsourcing cost reduction, and JD.com lowering the threshold for free shipping, should continue.

Of course, the profit surge this year is due to the lag between price adjustments and costs in JD Retail, which is unlikely to happen again next year. In the macroeconomic headwinds, the visibility of external revenue growth is not high, and the company may also reduce prices to gain market share.

In terms of valuation, the PE ratio is around 13 times next year, which is not much different from other peers. The short-term catalyst may depend on whether the company will launch a shareholder return plan